Intellectual property

Businesses spend thousands of dollars a year on software and SaaS system purchases and upgrades, yet continue to fall into the familiar trap of immediately signing pre-printed or online “form” license agreements designed to protect the vendor, not the purchaser.  Some of these “form” agreements are non-negotiable but many can be modified upon request.  From the perspective of the purchaser, here are five important points to consider before signing:   Permitted Users. How is this term defined? Workforces are increasingly made up of independent contractors, “temp” hires and even volunteers.  Is use of the software limited only to “employees” of the purchaser? What if the “users” are actually employed by a corporate affiliate or management company?  Tailoring standard “user” language to suit your particular situation can avoid problems later if there is a software user audit.   Training & Support. Is the support more than a helpdesk?  Is support personnel locally available if you need onsite help?  Is training included in the license fee and if so, how many hours? Is it provided onsite or remotely?  Negotiating adequate support and training is essential especially if the system is “mission critical” to the purchaser’s business.   Security & Encryption. Does the system comply with the security or encryption requirements required in your industry?  Ask the vendor to include a warranty to that effect and that your data will be stored and transmitted in a compliant manner.  It is not a good sign if the vendor appears unsure of the requirements or unwilling and you should probably look to other vendors.   Indemnity. An indemnity protects you if someone claims that your use of the system violates their intellectual property rights. An indemnification clause typically requires the vendor to either settle the claim or pay to provide a legal defense for the customer.  Having a properly worded clause in the license can help the purchaser avoid costly attorney’s fees affiliated with defending itself in a lawsuit, and require the vendor to fund a settlement or pay any damages awarded to the claimant.   Assignability. If a reorganization, merger or sale of the company occurs, it is important for the purchaser to have the ability to freely assign its rights under the license without the vendor’s consent. Negotiating these exceptions to a “no assignment” clause can prevent headaches later on, such as vendor delays in providing the consent, “consent” fees or a renegotiation of rates.     Albert Carrion Partner Richards Rodriguez & Skeith LLP 816 Congress Avenue, Suite 1200 Austin, TX 78701 Direct:  512.391.8201 Gen:  512.476.0005

Brand counsel use many tools to help businesses protect their brands. The most common tool is registering a trademark with the US Patent and Trademark Office. This process seems simple but there is much that goes into the strategy behind filing the application and moving it towards registration. I thought it might be helpful to share information to demystify the process a little, and also possibly demonstrate how experienced brand counsel provide value during this process. Before I begin launch into trademark registration, I wanted to share a few thoughts on other portions of brand protection. Perhaps the most important step in the process of brand protection is clearance. Without this step, it is impossible for the business owner to understand how much risk is associated with adopting a certain brand, and what paths are best for protecting the brand. Once this process is completed, brand counsel can explain the risk, the best paths to protecting your brand and the different avenues you might pursue for brand protection. The next step after clearance is registering rights in your brand(s). Some of these avenues may include trademark registration at the state, federal or any number of international jurisdictions; copyright registration; design patent registration; etc. One area that is getting more attention recently is NIL- name, image and likeness. Experienced counsel can ensure that NIL is included in the overall protection plan. Once you have some rights in place, you should police your brand. There are many tools that can be used for this, and this should be coordinated by brand counsel. Finally, if you find a potential infringer, you need to determine how/if you should enforce your rights.   Steps in obtaining a US Trademark Registration There are many assumptions in this article. Most notably, we assume that the business owner is aware of how much risk is involved in using and registering their brand and that they have decided the best vehicle for protecting the brand is filing a US trademark application. Further, this article pertains specifically to the US trademark registration process. While there are many overlaps in similar state and foreign processes, the US process is quite unique. The registration process is comprised of four general steps, namely, filing the trademark application, review by the government, review by third parties and proving that the brand is in use in commerce. These steps have multiple sub steps, each of which could fill a book on its own. I won’t pretend to provide all pertinent information in this article; simply an overview of the entire process. Filing the trademark application of course consists of gathering the information necessary to complete the application, but there is more strategy implemented at this stage than at any other step. Basic decisions such as choosing a filing basis drives the timing of the filing, the duration of the process and the costs of the process. Determining the combination of the brand and goods/ services to include in each application can be the difference in collisions with other brands one on hand and breadth of protection on the other hand. Finally, other strategies such as declaring portions of the brand to be descriptive or translatable can be included at this time. Review by the government is a very broad topic. The USPTO must consider many rules when reviewing an application and therefore there are many types of refusals that could be issued. Further, the facts that the examiner is being graded by the number of refusals issued and this same examiner is an unbiased party present unique opportunities for the applicant. Publication opens the window of time for third parties to review your application and to oppose it if they feel they would be harmed if the USPTO issued a registration. In many ways this is a repeat of the government’s review in that the same rules apply. However, the applicant will now be facing a very biased party—possibly a competitor or similarly adverse business. Fortunately, very few applications are opposed, but those that are frequently spend months or years in this stage. Proving use of the brand can happen at many stages of the registration process. This step is uncommon in the rest of the world, thus many foreign applicants have issues with this process. The USPTO rules are not necessarily intuitive, so many US applicants also have issues with this process. Filing Basis for a Trademark Application Not everyone can file an application to register a trademark. The application requires that each applicant declare at least one reason that it is allowed to file a trademark application. This is referred to as the application filing basis. There are four basic filing bases: intent to use the trademark in commerce; current use of a trademark in commerce; filings made directly to the USPTO, but based on a foreign application or registration; and applications filed indirectly to the USPTO via WIPO and based on a foreign application or registration. Each one of these methods involve a distinct decision tree that can lead to registration. Further, each one has various requirements that must be met along the way and even various privileges. Intent to use a trademark is exactly as it sounds. An applicant is allowed to use this basis if it has a bona fide intent to begin using its brand. The USPTO will review this application like every other application, and this application can even be published for third party opposition. However, the USPTO will not issue a registration until the applicant has shown that this brand is in use. This can be done prior to publication, in which case the process is not slowed down. Many applicants file this proof of use after publication, which could delay the registration process by up to three years. One reason this method is popular is that the brand is treated as though it began use as of the application date. One pain point about this basis is that it costs more money as the statement of use has a separate filing fee, as do the extensions which may be necessary. An applicant can also file an application based on its current use of a trademark. This method is likely the most straightforward as the application is filed directly with the USPTO and contains everything required to achieve registration. This simplicity makes it the fastest method and inexpensive. The other methods require that the applicant holds a valid registration or a pending application for the exact same brand in connection with the same or a more narrow list of goods and services in a foreign country. This method is popular amongst applicants wishing to gain trademark rights in multiple jurisdictions, and is generally best for foreign entities expanding their rights in to the US. One perq is that there are provisions that can allow the US application to be treated as though it were filed on the same day as the foreign application. A downside of the direct filing method is that the applicant must show that the foreign registration was issued before the USPTO will even publish the application for third party opposition. A downside of the indirect filing method is that WIPO has its own review process which the applicant must first complete before the application is sent to the USPTO.   What Brands and Identifications to include in a Trademark Application The most common thing people understand about trademark law is that the test for infringement is likelihood of confusion. While this is a multi-factor test, the basics in determining whether or not one brand is likely to be confused with another is whether the brands are similar and their goods and/or services are related. While this is more art than science, there is much opportunity to determine how the USPTO will view this analysis based upon what you put in the application. This becomes important when you are aware of specific brands that may cause some concern. For example, maybe you are opening a restaurant that bears your last name (e.g., Swanson) and it is similar to a name used on food sold in the grocery stores. The goal would be to prepare your application such that it presents your brand in a way that the USPTO (and ultimately the other party) does not think there is a chance that the public would be confused between the brands. First, in terms of the brands themselves, you can determine whether or not additional words or other elements should be included/excluded from the brand identified in the application. Maybe adding a distinctive term, design, stylization or color will help differentiate your client’s brand from the existing brand. Next, you can possibly describe the goods and services to reduce the risk that they are related. Maybe you serve seafood in your restaurant and the existing brand is know for apples. In that case, I would decide to make sure that the application is narrowed to seafood restaurants only. This is very much a judgment call and can really only be made by someone who has seen hundreds or thousands of situations in which similar items were compared. Also, this is the stage in which you make sure that your application is in the best position to be defended if the USPTO does claim that there is a likelihood of confusion.   Other Considerations in Filing a Trademark Application Filing a trademark application can be compared to making a first offer in a negotiation. First, you need to make sure your basic elements are correct. Second, you need to make other elements look the way you want them to look to get the USPTO to think the way you want them to think. Many of these decisions are very nuanced and require knowledge not only of trademark law, but also an understanding as to how the USPTO and third parties think. One basic thing includes making sure you identify the correct applicant. There are many cases in which a registration has been cancelled based on a simple mistake like this. Other basic things include making sure the right brand is identified, and that you’ve included correct information about the filing basis. Other elements are not crucial to the application being valid, but may be critical as to whether the registration is ultimately issued or how broad its registered rights may be. Common examples are whether or not you choose to disclaim exclusive rights in a word in your brand or how you choose to translate a foreign word in your brand. Another big consideration is what filing basis/bases you should use. Often an applicant qualifies for more than one, and choosing which one(s) to use may be the difference between a registration or an abandoned application. You can’t be effective in this area unless you understand trademark law, the registration process and how the USPTO and third parties think.   Common Formal Objections Raised by the USPTO in the Review of a Trademark Application Once you file the application, the USPTO will review it to see if it is fit for publication. Don’t expect a quick turnaround here. This review has been as quick as 3-4 months, but is currently taking about 6 months or longer. If the USPTO determines that the application is acceptable, the applicant will receive notice that it will be published for third party review. On the other hand, the USPTO may determine that there are some issues which prevent publication, in which case these will be explained to the applicant in an office action (aka Initial Refusal) and the applicant will be given 6 months to respond to these issues. The types of issues raised are generally labeled as formal or informal. The formal issues are more severe, and accordingly more difficult (and expensive) to overcome. The two most common formal objections are likelihood of confusion and descriptiveness. Likelihood of confusion can be very difficult to overcome. In general you need to show that, based on information present in the records, it is not likely that the public will be confused between your brand and other brand(s) on file with the USPTO. There is a lot of case law in this area and several plans of attack. Competent brand counsel can sort through this and determine the best path forward. Descriptiveness is potentially more subjective than likelihood of confusion. The line between a descriptive and a suggestive trademark is very important and also the most arbitrary in all of trademark law. Again, there is a lot of case law in this area and competent brand counsel can counsel you through the balancing of having the strongest brand possible and gaining a registration. Another category relates to the specimens of use provided in an application based on use in commerce. I will discuss this topic in more detail in a later section dedicated to proving use of a brand. I’ve alluded to competent brand counsel on several occasions. Another concept is good brand counsel. Good brand counsel will provide you with a cost estimate to prepare these arguments and the likelihood of success. Tip of the day: try to find competent brand counsel who keeps your bottom line in mind.   Common Informal Objections Raised by the USPTO in the Review of a Trademark Application Not all issues raised by the USPTO are severe, but they all must be addressed. Brand counsel typically refers to the less severe issues raised by the USPTO as informal issues. As with the formal issues discussed in the last section, the USPTO will typically raise informal issues in a refusal letter and provide you with 6 months to respond. The good examining attorneys at the USPTO will often call the counsel of record if the only issues spotted are informal, as these matters can sometimes be resolved in a phone call. I’ve also seen allusion to the possibility that the USPTO may start requiring faster responses to office actions which raise only informal issues. Informal issues can be as simple as correcting typographical errors or clarifying information about the applicant. They also can relate to the identification of goods and services, either requesting a more definitive or less ambiguous identification or suggesting that another class may be appropriate. Other topics include disclaiming exclusive rights to an element (i.e.,portion) or translating a word in the brand. As with formal objections, it is important that you respond within the 6 month deadline. Failure to do so can lead to the abandonment of the entire application, or at least a portion of the application if the refusal relates only to a portion of the goods and services. There is a possibility to revive an application, but this must be done relatively quickly and the revival process adds time and money to the registration process. While informal issues are less severe (i.e., easier to overcome), it is no less important to plan your response. For example, the USPTO’s request to disclaim a term may be easy to achieve, but what will that mean to the long-term protectability of your brand? It is important that you understand the repercussions of your response before you simply file it.   Common Grounds for Opposition Raised by Third Parties in the Review of a Trademark Application Once you have completed the USPTO review phase, the next step is publication. While this term refers to the old practice the Trademark Official Gazette being printed and distributed to brand counsel who would then pore over the thousands of applications published each week (always on a Tuesday!), today publication is primarily an online phenomenon. (I wonder how many people still receive the TMOG?) Third parties have 30 days after publication to oppose an application. They also have the option to file extensions of time to oppose, which are typically used to conduct further investigation, deliberation or settlement discussions. Assuming they decide to file an opposition, a mini trial begins in the Trademark Trial and Appeal Board. Like any trial, there is a plaintiff (the opposer) and a defendant (the applicant). The plaintiff must file a Notice of Opposition which states the grounds for the opposition. By far the common grounds for opposition are likelihood of confusion. There are other grounds, including descriptiveness, dilution, fraud and abandonment. In each of these, the opposer must show that the applicant’s application fails to meet the legal requirements and that the opposer would be harmed by registration of that brand. One drastic difference between overcoming a refusal from the USPTO and successfully defending an opposition is the seriousness of the other party. The USPTO is unbiased and is not as likely to go to great lengths to further its position. On the other hand, a party opposing your application will be personally harmed and is more likely to vigorously defend its position. Oppositions are not the only way to challenge a third party’s registered rights. I have been involved in matters in which a third party negotiates with an applicant and convinces the applicant to either voluntarily abandon the application or assign it to the opposer. I have also been involved in federal cases in which the court decides the opposition should be abandoned. It takes a seasoned brand counsel to help you determine which method is right for your situation.   Proving Use of a Brand in the Review of a Trademark Application The most common filing bases require that the applicant prove that it is currently using the brand. In layman’s terms, this means that you must provide the USPTO with a sample of your use, a brief description of this sample, the dates you first used your brand and a declaration that all items are currently in use. The general rules about a sample of use (a “specimen”) is that it should show the brand and roughly describe or refer to the underlying goods or services. The PTO’s rules regarding appropriate samples of use (a “specimen”) vary according to whether you are providing a good or service. If you provide a service, the most common acceptable specimen is advertisement.  If you provide a good, you should show packaging or some similar item that is likely to travel with the good in commerce. The applicant must also need to describe the specimen submitted. There is a lot of strategy in this step as you want to make sure there is enough detail that the PTO can understand the context of the specimen, but not so much that they may second guess whether or not the specimen is something that would commonly be acceptable as a specimen. In short, you should not want the examiner to have to think too hard as they are more inclined to be too critical. There are two dates of first use that need to be submitted—the date of first use anywhere and the date of first use in commerce. There is so much that can be written here, but in most cases these dates are identical. Finally, you need to sign a declaration that the brand is being used in connection with all items in the application. It is possible to delete items and/or make the declaration apply to only certain items, but a registration will not issue until a declaration is submitted for all items in the application (as amended). The number of specimens you are required to submit depends on the number of classes your application covers. The simple rule is that you need to submit at least one specimen per class of goods and services. If one class contains multiple items, a specimen for any one is sufficient provided you sign the declaration that the brand is in use for all items. There are some situations in which it seems unusual to submit only one specimen for an application, especially when the list of goods or services is exceptionally long. The USPTO has been known to challenge long listings of goods or services via an audit if anything seems suspicious, so one strategy is to submit multiple specimens to make this less likely. (Practice pointer: it is a good habit to collect and hold on to specimens for all items to be in a good position to address any future audit.) The final point relates to the timing of the statement of use filing. If you have filed your application based on use in commerce, this step is accomplished as part of the initial application for registration. If you file your application based on intent to use your brand, you essentially have two separate time periods in which to file the statement of use. The first time period begins the moment after you file the application, and ends once the USPTO concludes its review of the application. Filings made in this period are technically referred to as an Amendment to Allege Use. There are several advantages to filing in this time period. The primary benefit is that, if the USPTO does not accept your Amendment to Allege Use, you are allowed to withdraw it. Another benefit is that it reduces the time it takes to move forward to registration. There is a black out period at the end of the first period which extends through the publication period and ends once the USPTO issues the Notice of Allowance. The Notice of Allowance essentially states that the applicant has met all of the requirements for registration except for proving that the brand is in use. The issuance of the Notice of Allowance begins the second time period, and this period lasts for six months, and the applicant can request up to five six-month extensions, for a total of three years.  Filings made in this period are technically referred to as a Statement of Use. There are no real advantages to filing in this time period, other than it increases the overall time from filing date to registration. How is this an advantage? Remember that if you file based on intent to use, your effective priority date is the filing date. This could allow you to have a priority date that is easily four years prior to the date you actually began using the brand.   Summary Anyone can file a trademark application. This statement is true because it only requires accessing the USPTO web site (

There are four basic components to brand protection: searching, registering, policing and enforcing. These four aspects each have their own challenges which create a series of risks and opportunities. If done well, the four components work together in a way that achieves the business objectives of the brand owner. The area of enforcement is critical if you want to maintain your rights in your brand. The government does not employ trademark police. Accordingly, if you want to control the rights in your brand, you must assume the responsibility of enforcing your rights. Most clients are confused when it comes to the responsibility of enforcing the rights in their brands. The question of how aggressive they should be is quite common, which further breaks down into which parties should be contacted, what form the initial contact should take and how far you should push the issue. Of course the answer for each party is different, and often depends on the brand being enforced and the overall business mindset. This article relates to the enforcement component and some of the strategies that exist, including the offensive and defensive perspectives and how the decisions made may be impacted based on the status of the brand in question.   Introduction to Offense It starts innocently enough. You are talking to one of your better clients about an upcoming project. Suddenly, out of the blue, the client says that he’s sorry he didn’t come visit your booth at the last convention. You’re not sure what he’s talking about since your company hasn’t had a booth at a convention since COVID hit. You ask a few questions trying to get to the bottom of the misunderstanding. He insists he saw reference to your company at a convention last month and sends you a listing of all the companies who sponsored a booth. There you see it. It hits you like a ton of bricks. There is another company in your industry using a name that is so similar to yours that your best client thought it was you. You of course thank your client for bringing this to your attention and assure him that this was not your company. The client asks you what you plan to do. Then you think, “what do I plan to do??” There is great anxiety the moment you become aware that someone else is using a similar name to sell a related product. Your first thought is “I’ll sue them!,” but then additional questions come flooding in. Can I win a suit? Do I have rights? Who do I call? Can they stop me from using my brand? Is suing even the right step? How much will this all cost? All of these questions are valid. Having a competitor dilute the value of your brand is costly. Changing the name of your company, an important line of products or any other brand can also be an expensive change. Sometimes changes like this can threaten your business. If you find yourself in this position, you undoubtedly will wish you had spent more time protecting your brand. There are many options available in this situation. While filing a lawsuit is certainly one of these options, it is certainly not the only option and is likely not the first step. Further, there are non-legal implications to consider. For example, maybe you can find a way to turn this into a win-win; or maybe you need to consider the marketing and/or social media implications if you are too aggressive. If you find yourself in this situation you need to contact brand counsel for advice. Some lawyers in this space refer to themselves as trademark lawyers or IP (intellectual property) attorneys. I would caution that an attorney’s title shows what area of law the attorney truly practices. While any of the titles I listed will likely lead you to a competent lawyer, titles like business counsel, divorce attorney or patent lawyer will lead you to lawyers with different skills. If the only lawyer you know practices criminal law or employment law, you should only call them if you want to ask for a referral to brand counsel.   Counsel’s Review of an Infringement claim The test for infringement in trademark law is likelihood of confusion. That is, will a typical consumer of one brand likely be confused that the other brand is somehow connected. The most significant factors in this test are whether the brands themselves are similar, and whether the underlying goods or services are related. If there is a likelihood of confusion, the junior user is frequently forced to stop using its brand. Given this, one of the first steps by counsel in any infringement analysis is to determine which party would have rights to continue using their brand if it is determined that the brands are infringing. This frequently boils down to: who started using their brand first? The last thing you would want to do is to successfully argue that your brand is likely to be confused with another brand, only to discover that the other brand has priority and can continue using the brand while you will need to stop using your brand. It is not uncommon to hire an investigator to help with this step. Assuming you have priority, counsel next would want to determine whether there is a likelihood of confusion. This includes comparing the brands themselves to determine how similar the commercial impressions of both brands are, and compare the goods and/or services to see if they are related. Counsel may also want to see if the brands travel in the similar channels, whether there are many similar brands in this market space, whether there has been any actual confusion, etc. I typically take an extra step at this time. As counsel, I write a paragraph or two describing why there is a likelihood of confusion between the brands, and then I pick apart my argument. I go through this several times until I am convinced that I can at least make a prima facie case of infringement. Once I feel confident that my client has priority, there is a likelihood of confusion and that I can express a convincing case of infringement, I then talk to the client about next steps. Determining that there is an infringement and your client has priority is one thing; determining what to do about it is the critical step in the process.   Counsel’s Discussion with the Client regarding an Infringement claim Once counsel has determined that there is a likelihood of confusion, they should discuss the “behind the scenes” issues with the client. The client likely has so much to add to the analysis if it is asked the appropriate questions by their lawyer. These questions typically relate to the client’s interest in the brand, the history between the client and the infringing party, the client’s appetite for pursuing this matter and, most importantly, what outcome the client desires. The answers to these questions can be used to chart a strategy for pursuing the infringing party. The most important question is the client’s perception of its own brand. There are typically two parts to this including how important the brand is and how long the client plans to use the brand. I next like to know if there is a history between the two companies. This can include whether they have been involved in prior litigation, prior demand letter campaigns, stolen employees from one another, taken client accounts from each other, etc. Third I like to know how likely the client is to pursue this matter to a final disposition. Would the client be willing to sue over the matter if necessary? Is the client trying to get a quick and easy result? Is the client just trying to make a point? Finally, I’d like to know what the client wants as a final outcome. This can include a simple interest in eliminating confusion between the parties to monetary damages from the other party to compensate for ongoing harm. Once I’ve collected this information, I like to develop a strategy for contacting the infringing party. This first contact is crucial as it often sets the tone for the duration of the conflict between the parties. It is also important to consider that this initial contact could get published on social media, so in addition to legal considerations, you should also factor in social and marketing implications. While there is no “one size fits all” solution, initial contact strategies typically fall into one of four categories: win-win solutions, notice letters, demand letters and lawsuits. It is not uncommon for a contentious conflict to progress through these categories. I will discuss each of these over the next four posts.   Win-Win Solutions in Connection with Trademark Infringement Not all conflicts need to be contentious. In fact, I like to START my strategy analysis with the objective of finding a win-win solution. I like this strategy because, when compared to the other strategies, it is far more likely to be successful, is often completed in half the time and can be far less costly. Win-win solutions can take a number of forms, but common solutions are license agreements and co-existence agreements. A co-existence agreement is one potential good outcome for both parties. This agreement acknowledges that each party has the right to use their brand in specific ways. Typical divisions are along geographic lines (e.g., one party can use its brand east of the Mississippi River, and the other company can use its brand west of the Mississippi River), by offerings (e.g., party A can use the brand on product X and party B can use the brand on product Y) or any other way that will allow the companies to use the brands while avoiding confusion. This agreement may be disfavored as the infringing party can continue to use its brand, but it effective in situations in which there is a close case of infringement. One major benefit is that the parties can continue to protect their brands against other parties. A license agreement allows the infringing party to continue using its brand, but now the use will be under the control of the client and the benefits of the use will accrue to the client. It is even possible that the client can get royalties from the use. Further the agreement can be drafted such that the client can terminate the license if the other party fails to meet certain future criteria. One of the benefits of this arrangement is that the infringing party acknowledges the client’s rights in the brand, and the client will gain some control over the infringing party’s future use of their brand. Of course one of the negatives is that the infringing party will continue using its brand. Other win-win solutions could include one party acquiring the intellectual property rights of the other or one party agreeing to stop using the brand once a specific event occurs (e.g., once current inventory sells out, not to exceed 6 months). Win-win solutions make the most sense when there is a weak or logically difficult case of infringement, or the “behind the scenes” factors from the client show that it does not want to be aggressive against this specific infringing party. While these solutions do not have the great feel of winning a lawsuit or otherwise making a third party stop using a mark, they are nonetheless useful in demonstrating that the client is policing its brand and has positive enforcement outcomes. These solutions also start the conflict off in a positive direction and lets the other party know that your client is reasonable, but resolute.   Notice Letters in Connection with Trademark Infringement Notice letters are another way to begin a conflict in a non-contentious manner. Unlike a demand letter which sets out a specific demand, a notice letter simply notifies the other party of your client’s rights and generally describes that the other party is on the verge of infringing your client’s rights. This letter makes the most sense when at least one party has made changes to its use of a brand (e.g., they have been offering the brand for sale in new geographic locations or in connection with an increasing number of goods or services). I like this strategy because it does not require a response by the other party, but serves to put them on notice if they do commit an act described in the letter. The art of the notice letter is to be specific and reasonable, and to do so without making a specific legal threat. Most letters regarding trademark infringement describe the sending party’s rights and the reasons the receiving party may be infringing those rights. The notice letter is tweaked in this respect to describe the changes that the receiving party has made that has made the use of its brand likely to be confused with the sender’s brand. An effective notice letter will contain language that a specific act may constitute infringement. The sender should avoid making definitive statements and threats as this could lead to the receiving party requesting a declaratory judgment. An example may help clarify these points. Assume you own a restaurant in Boston, and you’ve become aware that another company owns a similar style restaurant with a nearly identical name in Washington, D.C. Then you learn they opened another location in Philadelphia, and then another in New York City.  You are concerned that Boston is next, and this would cause confusion. I would add language that you are concerned about their growing geographic use of their brand, that further growth would result in a likelihood of confusion, and you would consult with counsel regarding appropriate next steps if they opened a restaurant within 25 miles of your restaurant. Notice letters make the most sense when you are concerned that a continued action by a third party will result in a likelihood of confusion. These serve the incredibly useful purpose of attempting to prevent infringement, and can be used as evidence that the other party was aware that their action would be infringement.  These letters typically start the conflict off in a positive direction and lets the other party know that your client is reasonable, but resolute. You do need to be careful about your use of these letters. For example, if you feel the other party’s current use of a brand infringes your brand, sending a notice letter can be interpreted that you think their current use is acceptable, thus weakening your ability to protect your brand.   Demand Letters in Connection with Trademark Infringement The most common request I receive from clients who have discovered an infringer is that I send a demand letter. While this is frequently the best first step, it is worth considering whether starting the conflict with an aggressive tone is the right move to achieve the desired objective. My father taught me that you can go from nice to forceful much easier than you can go from forceful to nice. This is axiom is equally true in brand enforcement. One of the first things to consider before sending a demand letter is whether you can resolve the issue via a win-win solution or a notice letter. The historical guidelines for a demand letter were that the letter should identify your client’s rights, describe how the other party is infringing those rights and make specific demands that would eliminate the confusion.  These guidelines hold true today, but we should now add that the letter should be reasonable from a social/ marketing perspective. Why? Your demand letter is very likely to be posted by the recipient on social media in an effort to embarrass the client (and possibly counsel too). Thankfully I have always followed the “reasonable” standard as I have had several of my demand letters land on social media pages. The last thing you want for your client is to have your letter become the leverage the other party needs to thwart your efforts to stop the infringing behavior. I am pleased to share that on several occasions in which my demand letter was shared on social media, the majority of the comments supported my position that the infringing party was being unreasonable. 😊 Another concern with sending a demand letter is that the client needs to be ready to pursue the matter until it gets a reasonable result. That is, if your demand letter is ignored, you need to be ready to follow up with another letter, call the opposing party, send emails, file suit, etc. until you get appropriate redress. Sending a demand letter and not following through is worse than not sending a demand letter in the first place. Make sure the client knows what it is willing to do in the likely event that the other party disagrees with or ignores the letter. This may include both what lesser concessions the client is willing to accept and how much effort they are willing to take to get these concessions. It should be clear to the client that filing suit could be an alternative. My final comment also relates to lawsuits. The other party could use the demand letter as grounds to request a declaratory judgment from the court. That is, they may seek a legal determination that their actions do not infringe your client’s rights. This type of legal action can be expensive, and typically serve as a segue for your client to countersue with a claim of infringement.  Accordingly, demand letters make the most sense when you are very bothered by the actions of the infringing party, and are willing to take all reasonable actions to get a desired result.   Lawsuits based on Trademark Infringement Lawsuits are seldom the best place to start in an enforcement matter. First, lawsuits are very expensive so these should be reserved for special occasions. Second, common decency dictates that the other party should be given a chance to address the matter before you involve the courts. Third, the courts will likely suspend the suit to allow the parties a chance to resolve the matter amicably before the court will get involved, which will mean the plaintiff has wasted the costs of filing the suit if the matter is resolved without the court’s involvement. I want to be clear that my comments above relate to the first steps in brand enforcement. I strongly encourage clients to file a suit if their rights are being infringed and the infringing party refuses to take action. Lawsuits are expensive, but they are far cheaper than a competitor stealing from or chipping away at the value of your brand. There are a few occasions in which filing suit is the correct first action. The most common is when you need immediate action to stop a third party from taking an action that will cause irreparable harm to your client. This is typically referred to as a temporary restraining order (TRO). As the name implies, it only seeks temporary relief, but it is often coupled with a lawsuit that seeks to resolve all issues. Another instance in which a lawsuit may be an appropriate place to start is when the parties have a history of antagonistic interactions. In this case the client is likely to know that it won’t receive any meaningful response from a demand letter, and the only way to get a response is to be compelled by the court. Lawsuits of any variety are expensive, and trademark infringement actions are no exception. Depending on factors such as the complexity of the arguments and the size of the law firm representing you, a lawsuit can easily reach six figures to complete, and may reach seven figures. Accordingly, this step should be reserved for serious issues in which there is no other palatable solution available.   Non-traditional Responses to Trademark Infringement My previous four posts assumed that the infringed party would communicate directly with the infringing party. While this is the common way to handle these situations, it is not the only way. In today’s world it has become common for parties to operate on platforms offered by others. For example, I frequently post artciles on LinkedIn since it allows me to create a base of followers far easier than I could otherwise build. What if I were using this platform to infringe the rights of my competition? Certainly they could send me a message directly (and they may even use LinkedIn’s message features to start the conversation). Another option is that they could use features offered by LinkedIn to delete my infringing post or, in extreme circumstances, ban me entirely from the platform. LinkedIn is not the only platform on which infringement is likely. Other social media platforms such as Facebook, Instagram and others face similar situations and offer take down options. Social media companies are not the only ones with these concerns. Ecommerce platforms perhaps have a bigger potential problem and most have them have instituted provisions to address any problems. One of the more well-known provisions is Amazon’s brand registry. This system has become popular enough that it is often cited as one of the causes of the increase in trademark applications in the USPTO. Parties should think creatively when addressing infringement. While reaching out to the infringing party is usually most logical, it is not the only solution. Using a third party can be either a method to resolve the infringement entirely, or at least add leverage when dealing with infringement.   Defending an Assertion of Trademark Infringement We’ve discussed how to address a situation in which you want to tell another party that they are infringing your rights, but what about the other side? What should you do when you receive a letter (or lawsuit) claiming that you have infringed the rights of a third party? If you only remember one thing, remember that you should not ignore this letter! Further, if the writer has requested a response by a certain date, try to at least respond by that time that the matter has been forwarded for serious examination and that a response will be forthcoming. In many ways defense is the opposite of offense. You should start by deconstructing their claims of infringement. What support do they provide that they have rights? What evidence do they include that you have infringed their rights? If there is infringement, have they proven that their rights predate yours? Do you have any contrary evidence? You should look at all of this critically and determine whether you agree with the other party. Once you have your own initial sense of whether your party is infringing, it is time to discuss how you should respond. If you feel your client is undoubtedly infringing, you should suggest that, to prevent further conflict, your client will agree to change over a period of time. If you feel there is honestly no infringement, you should state so definitively without going into great details of why there is no infringement. (Not doing this can prolong the conversation, only about issues other than the relevant issue.) If the party continues pestering you, you may want to consider whether filing a Declaratory Judgment action is appropriate. The tough consideration is when the matter is a close call. In close calls, my normal advice is to offer something that you feel makes the chance of infringement even less remote. It is best if this thing is something your client did not value. For example, if you are a restaurant being contacted by a consumer ice cream brand, maybe you offer to never sell cold desserts in grocery stores. This may give the other side the moral victory they feel they need to close the matter quickly, and without causing your client any great pain. Pro tip: it makes sense to memorialize this in a co-existence agreement. More than anything, I try to put myself in the other party’s shoes. What would I want if I were them? What would make this go away? Is there a way to find a win-win?   Conclusion It is important to keep in mind that brand enforcement is just one portion in the cycle of brand protection. This means several things to me. First, brand enforcement is no LESS important than the other three links. Have you bothered to search and clear your brands before using them? Have you taken the care to register the brands that are most valuable to you? Are you engaged in policing activities? If you’ve answered “Yes” to these questions, you should be diligent in undertaking enforcement matters. Second, brand enforcement is no MORE important than the other three links. If you feel you would want to send a demand letter if a third party began infringing your rights, you should certainly take part in the other steps. While you certainly have the right to send demand letters without engaging in the other steps, your chance of success is much higher if you do engage in all steps. Finally, it is worth remembering why brand protection is important. A brand is an element that allows you to be distinguished from your competition. It is how you are identified by your customers. Without it, you are one of the masses. You’ve worked hard to pick just the right brand and then you spent much effort to develop it to the place it is today. Its value is real. Losing it could be a business ending outcome. Protect your brand!


What's Trending

I once had the thrill of interviewing Jerry West on management. He was “The Logo” for the NBA, although back then they didn’t advertise him as such. Only the Laker followers knew for sure. In 1989 the “Showtime” Lakers were coming off back-to-back championships.  Pat Riley was a year away from his first of three Coach of the Year awards. 

Can you Offer Too Many SKUs to Your Customers? The short answer is YES! A SKU, or Stock Keeping Unit, defines each different product version that you sell and keep inventory of.  There may be different SKUs of the same overall item based on size, color, capacity (think computer or cellphone memory), features, and many other parameters.  For build to forecast businesses, that number of variations can quickly explode and become difficult to manage. Your customers are busy and want ordering simplified. Of course, they may need (or want) more than one variation of a product. That is reasonable and a common aspect of business – one size does not fit all! But there is a point where too offering too many SKUs is not value added either for your customer or your business.  In his April 30, 2013 article “Successful Retailers Learn That Fewer Choices Trigger More Sales” in Forbes, Carmine Gallo discusses his experience and a study about “choice overload” by other authors. He writes about a retailer that “has discovered that giving a customer more than three choices at one time actually overwhelms customers and makes them frustrated…when the customer is faced with too many choices at once, it leaves the customer confused and less likely to buy from any of the choices!” Choice overload is well-documented in consumer studies but can apply in B2B as well. While customer satisfaction is important, another key concern is the often-hidden costs associated with a business offering and managing a large number of SKUs for a given product type. These costs include holding inventory, S&OP (Sales and Operations Planning) team time, small production runs, and scrapping inventory. Holding inventory takes up space, which may come with a cost or utilize racks that could be used for other products. Scheduled inventory counts take up employee time and may result in blackout periods when the warehouse is not shipping product.  The more SKUs there are, including extra SKUS, the greater the potential impact. The Sales team’s forecasting and the Operations team’s purchasing reviews that are part of the S&OP process can occupy more of their valuable time if they need to consider these times. If small orders or forecasts require a new production run, this could be costly and create excess inventory. Whether from this new production or past builds, eventually it will make sense to write off and scrap old inventory, another cost impact to the company. How do you know which SKUs to focus on if you wish to look at reducing your total number of SKUs? Start by examining SKUs that have: Low historic sales over a period of time Small variations between SKUs that customers do not value Older technology or model when newer option SKUs are available This requires a true partnership between Sales and Operations. It starts with educating both teams on the costs involved – neither group may be aware of the money and time impact to the company. Periodic (such as quarterly) reviews of SKUs that meet the above descriptions should become a fixed part of the calendar. A review of the data and other available for sale options should result in the identification of SKUs which may not be needed. At that point, it is helpful to have a customer friendly EOL (End of Life) Notice process by which you inform customers of last time buy requirements for this SKU and alternates available. It is usually best to provide some time for the last time buy in the interest of customer satisfaction, although that may not always be necessary. At a company that designed and sold electronics, a robust SKU rationalization process was implemented to help address these issues. A representative from the Operations team analyzed SKUs that met a version of the above criteria and suggested candidates for the EOL process. Next, a member of the Sales team reviewed them and, where appropriate, issued product change or EOL notices to customers, providing them time for last time buy orders when needed. These steps helped reduce the work involved in maintaining these SKUs while not leading to any customer complaints. A final note – sometimes it makes sense to continue offering low selling SKUs – to support customers buying other items (hopefully in larger quantities). It may be worthwhile to encourage them to keep coming back to you for all of their product needs and this may be a way to accomplish that. But it helps to understand that this is truly the case and not assume that this customer would not be equally happy with another, more popular, SKU.   Steven Lustig is founder and CEO of Lustig Global Consulting and an experienced Supply Chain Executive.  He is a recognized thought leader in supply chain and risk mitigation, and serves on the Boards of Directors for Loh Medical and Atlanta Technology Angels.

When it comes to careers, business owners are a minority of the population. In conversations this week, I mentioned the statistics several times, and each owner I was discussing it with was surprised that they had so few peers. According to the Small Business Administration (SBA), there are over 33,000,000 businesses in the US. Let’s discount those with zero employees. Many are shell companies or real estate holding entities. Also, those with fewer than 5 employees, true “Mom and Pop” businesses, are hard to distinguish from a job. The North American Industry Classification System (NAICS) Association, lists businesses with 5 to 99 employees at about 3,300,000, and 123,000 have 100 to 500 employees (the SBA’s largest “small business” classification.) Overall, that means about 1% of the country are private employers. Owners are a small minority, a very small minority, of the population. Even if we only count working adults (161,000,000) business owners represent only a little more than 2% of that population. So What? Where am I going with this, and how does it relate to our recent discussions of purpose in business exit planning? It’s an important issue to consider when discussing an owner’s identity after transition. Whether or not individual owners know the statistics of their “rare species” status in society, they instinctively understand that they are different. They are identified with their owner status in every aspect of their business and personal life. At a social event, when asked “What do you do?” they will often respond “I own a business.” It’s an immediate differentiator from describing a job. “I am a carpenter.” or “I work in systems engineering,” describes a function. “I am a business owner” describes a life role. When asked for further information, the owner frequently replies in the Imperial first person plural. “We build multi-family housing,” is never mistaken for a personal role in the company. No one takes that answer to mean that the speaker swings a hammer all day. Owners are a Minority We process much of our information subconsciously. If a man enters a business gathering, for example, and the others in the room are 75% female, he will know instinctively, without consciously counting, that this business meeting or organization is different from others he attends. Similarly, business owners accept their minority status without thinking about it. They expect that the vast majority of the people they meet socially, who attend their church, or who have kids that play sports with theirs, work for someone else. There are places where owners congregate, but otherwise, they don’t expect to meet many other owners in the normal course of daily activity. This can be an issue after they exit the business. You see, telling people “I’m retired” has no distinction. Roughly 98% of the other people who say that never built an organization. They didn’t take the same risks. Others didn’t deal with the same broad variety of issues and challenges. Most didn’t have to personally live with the impact of every daily decision they made, or watch others suffer the consequences of their bad calls. That is why so many former owners suffer from a lack of identity after they leave. Subconsciously, they expect to stand out from the other 98%. “I’m retired” carries no such distinction.       This article was originally published by John F. Dini, CBEC, CExP, CEPA on

In a recent research study by The Value Builder System™, they analyzed data from 20,000 business owners who completed a Value Builder assessment of their business and discovered that owners who have businesses dependent on them, known as Hub & Spoke owners are facing a 35% discount on the value of their businesses and part of the problem may be the degree of customization they offer. For the purposes of the study, a Hub & Spoke owner is someone who answered the question “Which of the following best describes your personal relationship with your company’s customers?” with the response, “I know each of my customers by first name and they expect that I personally get involved when they buy from my company.”  One reason customers want the owner to personally attend to their project is the degree of customization Hub & Spoke owners offer.  In fact, the study shows that Hub & Spoke owners are more than twice as likely to say they offer a complete custom solution for each customer.  Since the owner is usually the person with the most subject matter expertise inside their company, it’s not surprising customers want the owner’s full attention on their job. The secret to making a business less reliant on its owner is to stop offering a custom solution for every customer.   How Ned MacPherson Built More Value By Doing Less   Ned MacPherson is a digital marketing guru, so it’s not surprising that when he first started offering his time, it was in demand.   In the early days as a consultant, he offered all sorts of growth hacking services. But when demand outstripped his supply of time, Ned had a decision to make. He could either turn away prospective clients or build a team of consultants underneath him.  As a growth guy, the idea of treading water didn’t appeal to Ned, so he opted to build a team. However, to ensure his team could execute without him, Ned decided to focus on one service offering: post-click analysis. Rather than help optimize a website for the entire customer journey, Ned’s company would become one of the world’s leading firms on optimizing a customer’s journey after they opted in to a website.   Most digital marketing consultants offer a wide range of services, but Ned knew it would be impossible to remove himself if they offered help in too many areas. By specializing in post-click analysis, Ned and his team were able to streamline their offering. Demand for Ned’s time started to diminish as his employees became some of the world’s leading experts in a narrow slice of the analytics market.   Within seven years of starting Endrock Growth & Analytics, Ned had 70 employees, more than $2 million a year in EBITDA, and multiple acquisition offers.   

The sale of a business marks a major life event. It’s emotional, stressful, and exciting all at the same time. And unfortunately, it’s often a lot of work. Most business owners will only experience the process of selling a business once in their life. This is both good and bad news. On the bright side, you only need to get through it once. But many business owners aren’t ready for the process and risk leaving money on the table as a result. With many sellers relying on the sale to fund their retirement and lifelong financial goals, getting it right from the start is critical. Here are tips from sell-side business advisors on what to do (and not do) when selling a business. What to do (and not do) when selling a business Start thinking about selling your business early — really early One of the top mistakes sellers make when selling their business is not starting the process early enough. There are many reasons starting last minute can really hurt your bottom line. It’s not uncommon for business owners to assume they’ll never retire at some point during their life. But as often happens, life changes. Perhaps health concerns for you or a spouse make continuing to run your business difficult. Or maybe you eventually lose the excitement when getting up every day and want a change of pace. Sudden sales or immediate retirements Unfortunately, when business owners want to sell with a tight timeline (or fire sale), they may have fewer options to exit. It’s not uncommon for some buyers to want the owner and/or members of the management team to stay on for a period to help with the transition. If there’s an earn-out, it’ll usually require the seller to stick with the company for different milestones (time, financial, or otherwise) to earn the full purchase price. Earn-outs aren’t ideal for sellers, but if you’re unwilling or unable to consider deals with any continuation component, it could impact the sale price, timeline to find a buyer, or both. Make your business more sellable later by getting advice now Business brokers often recommend getting a valuation done years before expecting to sell the company. Sarah Grossman, Principal of BayState Business Brokers in Needham, MA, says this helps sellers “shape their timeline and any financial planning that needs to be completed prior to a sale.” Understanding the fair market value of the company is critical to setting expectations for the seller, but understanding the drivers of the valuation can help increase the sale price over time. Grossman says, “a [business] broker can advise them on things they can do in their business over the next few years to make it more saleable when it does go on the market.” How to maximize your cash at closing Aaron Naisbitt, Managing Director at Dunn Rush & Co, an investment bank focused on sell-side M&A in Boston, MA, emphasizes the importance of going to market and knowing what your business is worth. He says, “the biggest mistake many businesses owners make is not running a competitive process when the business is capable of attracting interest from a broad number of buyers. This mistake most often occurs when the owner has already made the second biggest mistake – not taking the time to educate themselves and prepare adequately for the process.” Not every business will be able to run a competitive process. But those that can, and don’t, “Will leave money and terms on the table if they do not do so” he adds. Getting professional help is key here as trying to negotiate a sale directly with a buyer might be short-sighted. Grossman says it’s not uncommon for sellers to be approached directly by competitors. She cautions sellers considering working with buyers directly as “They could be leaving significant money on the table without a clear understanding of the valuation of their company. Sellers also need to work with a broker and their advisors to understand a typical deal structure so that they can maximize their cash at closing.” The importance of understanding the terms of the deal cannot be overstated. This is where money is made or lost. Naisbitt cautions that sometimes terms can sound really good, but aren’t always common sense. He adds that without an advisor, sellers “Don’t know where to argue.” During negotiations, you have to consider “What is it that’s important to you and what are you willing to give up” he says. Exit planning is not time to DIY — assemble your team of advisors When selling a company, gathering your team of advisors early on is key to getting a successful outcome. Again, odds are you haven’t sold a business before and probably won’t again. We don’t know what we don’t know…and you only have one shot to get this right. Your team of business and personal advisors will be instrumental in getting the deal over the finish line. Your business advisory team may consist of: a business broker or M&A advisor, accounting and tax advisors, and transaction/M&A attorney. On the personal side, your sudden wealth advisor who focuses on helping individuals experiencing a transformative liquidity event. Be sure to involve your wealth advisor in discussions around deal terms too. For example, when considering deal structure, it’s important to ensure alignment with your objectives or financial needs. What are your income needs after the sale or do you have plans for a big purchase? Your advisor can help determine how much cash you need at closing and whether to consider the pros and cons of arrangements like an installment sale. And at closing, a financial advisor can help you determine Section 1202, realizing the gain over time with an installment sale, asset versus stock purchase, or state tax implications such as the charitable goals, legacy objectives for heirs, or estate tax planning strategies. Brokers explain what sellers are most unprepared for during the process Selling a business is a lot of work. In addition to running the company in the usual course of business, sellers also need to comply with a host of due diligence requests from the buyer’s team and the lender financing the transaction. The magnitude of this process is by far the most 

In March 2022, Florida enacted the politically charged Individual Freedom Act, informally known as the STOP WOKE (Wrongs to Our Kids and Employees) Act. Less than two years later, the U.S. Court of Appeals of the Eleventh Circuit blocked the enforcement of the Act on the grounds it violates employers’ right to free speech. This decision directly impacts employers in the Eleventh Circuit and will have a ripple effect on employers nationally.   How did the Individual Freedom Act (Stop WOKE Act) affect employers? The Act attempted to prevent employers from mandating training or meetings for employees which “promote” a “certain set of beliefs” the state “found offensive” and discriminatory. There are eight prohibited beliefs each relating to race, color, sex, and national origin. According to the Act, employers must not teach the following: Members of one race, color, sex, or national origin are morally superior to members of another race, color, sex, or national origin. An individual, by virtue of his or her race, color, sex, or national origin, is inherently racist, sexist, or oppressive, whether consciously or unconsciously. An individual’s moral character or status as either privileged or oppressed is determined by his or her race, color, sex, or national origin. Members of one race, color, sex, or national origin cannot and should not attempt to treat others without respect due to race, color, sex, or national origin. An individual, based on his or her race, color, sex, or national origin, bears responsibility for, or should be discriminated against or receive adverse treatment because of, actions committed in the past by other members of the same race, color, sex, or national origin. An individual, based on his or her race, color, sex, or national origin, should be discriminated against or receive adverse treatment to achieve diversity, equity, or inclusion. An individual, by virtue of his or her race, color, sex, or national origin, bears personal responsibility for and must feel guilt, anguish, or other forms of psychological distress because of actions, in which the individual played no part, and were committed in the past by other members of the same race, color, sex, or national origin. Such virtues as merit, excellence, hard work, fairness, neutrality, objectivity, and racial colorblindness are racist or sexist, or were created by members of a particular race, color, sex, or national origin to oppress members of another race, color, sex, or national origin. Employers still had the ability to mandate employees attend sessions that either refute these concepts or present them in an “objective manner without endorsement.” This dictates how an employer deals with its employees and is particularly limiting in how employers address discrimination training. Employers who failed to adhere to the law were liable for “serious financial penalties—back pay, compensatory damages, and up to $100,000 in punitive damages, plus attorney’s fees—on top of injunctive relief.”   The Ruling – Inc. v. Governor [2024] In March 2024, the U.S. Court of Appeals of the Eleventh Circuit served an injunction preventing enforcement of the Act. Despite the state insisting the Act banned conduct rather than speech, the court ruled the Act unlawfully violated the First Amendment’s right of free speech by barring speech based on its content and penalizing certain viewpoints. While certain categories of speech such as “obscenity, fighting words, incitement, and the like” are traditionally unprotected, the court pointed out that “new categories of unprotected speech may not be added to the list by a legislature that concludes certain speech is too harmful to be tolerated.” Florida is keen to appeal against the decision.   What does this mean for employers? Regardless of one’s opinions on the matter, this can be viewed positively from an employer’s standpoint. Employers in the private sector can control speech in the workplace, and this ruling confirms their autonomy will continue. Whether or not the rest of the country will follow suit remains to be seen. This case, in tandem with the US Supreme Court’s ruling to ban race based affirmative action, signals today’s intense political climate is likely to continue to impact how employer diversity, equity and inclusion (DEI) initiatives are approached. Employers should continue to review their DEI initiatives, ensuring they are in line with the latest precedents. Brody and Associates regularly advises management on complying with the latest local, state and federal employment laws.  If we can be of assistance in this area, please contact us at or 203.454.0560      


Explore the Knowledge Exchange